Graphic Packaging Holding Company

Graphic Packaging Holding Company (NYSE: GPK) makes paper-based packaging for food, beverages, foodservice, household goods and other consumer products. Its operations combine paperboard manufacturing with converting that board into finished packaging.

Third-quarter results

Three months ended September 30. USD millions, except diluted earnings per share and percentages.

Adjusted results remove selected exit, restructuring, impairment and other special costs. Adjusted EPS also removes purchased intangible amortization and related tax effects. Commodity and operating-cost inflation, together with weaker pricing, outweighed operating improvements in the year-over-year EBITDA comparison.

The quarter's adjusted EBITDA margin improved from 11.3% in Q2, matching the direction of management's earlier sequential recovery expectation.

Cash recovery and its components

For the first nine months, GAAP operating cash flow was $295 million versus $320 million a year earlier. Capital spending fell to $287 million from $808 million.

Adjusted cash flow was $314 million versus a $332 million outflow. The current calculation adds $227 million of net investing cash receipts from sold receivables and $79 million of selected cash-cost adjustments to operating cash, then subtracts capital spending.

The $646 million improvement comprises $521 million of lower capital spending, $136 million more net receivables receipts and $14 million more cash-cost adjustments, offset by $25 million less operating cash. Quarterly adjusted cash flow was $359 million, following a $45 million first-half outflow.

Debt and the two leverage measures

At September 30, cash was $337 million and total debt before issuance costs was $5.520 billion. Net debt was $5.183 billion, down $300 million from June and $148 million from December 2025.

Headline leverage rose from 4.7 times in June to 4.8 times in September as reported trailing adjusted EBITDA fell from $1.173 billion to $1.081 billion. This ratio uses net debt.

The separate bank-defined total leverage ratio was 4.44 times versus 4.37 times in June. Interest coverage was 4.27 times, above the three-times minimum. The company reported compliance.

November credit amendment

The November 2 amendment extends covenant relief through September 2028. The March 2027 bank leverage ceiling increases from 4.75 times to 5.25 times.

Later limits step down to five times for June and September 2027, 4.75 times for December 2027 and March 2028, and 4.5 times for June and September 2028. The 4.25-times ceiling applies from December 2028.

Qualifying lenders receive a consent fee of 0.10% of their unused commitments and outstanding loans, together with applicable fees and expenses. These are amended contract limits rather than forecasts of actual future leverage.

Annual plan and earlier commitments

Management expects approximately $8.6 billion of annual sales, $1.05 billion of adjusted EBITDA and $0.65 of adjusted EPS. In August it already expected EBITDA at the low end of the $1.05 billion to $1.25 billion range and sales at the high end of the $8.4 billion to $8.6 billion range.

Adjusted cash-flow guidance remains $600 million to $700 million, with capital spending below $450 million. The earlier February cash target was $700 million to $800 million; that reduction had already been made by August.

Expected structural savings rise to approximately $90 million from August's $85 million. Reported quarterly savings total $65 million through September, leaving about $25 million forecast for Q4.

Waco and the operating milestones

Waco produced its first saleable paperboard rolls in October 2025. Management then expected 12 to 18 months to reach full production. The latest reporting remains within that announced ramp period.

The next results can test further margin improvement, delivery of the remaining savings and progress toward the annual cash targets, alongside debt reduction under the revised bank timetable.